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Survey: For 36% of Americans, Economy Informs 2020 Presidential Preference

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

The presidential election will dominate headlines throughout 2020, with voters and pundits alike obsessively following polls, reading coverage and watching debates to get a feel for who’s leading in the race for the White House. In addition, they’ll be closely watching another key indicator for the race: the performance of the U.S. economy.

MagnifyMoney commissioned a survey of 1,000 Americans to gauge how people think about the relationship between the economy and the 2020 presidential election. Our survey found that nearly four in ten respondents said monitoring the economy helps them decide which candidate to support, and believe the results of an election can be at least somewhat predicted by the performance of the economy.

Key findings

  • About 41% of respondents believe the outcome of a presidential election can be predicted based on U.S. economic performance in the 12 months leading up to the election.
    • Around 36% said monitoring the stock market and the economy helps them decide which presidential candidate to support.
  • Republicans are more confident than Democrats about three key aspects of the economy over the next 12 months: that the stock market will continue to rise, jobs will continue to be added to the economy and the overall economy will continue to grow.
  • Nearly 1 in 3 respondents think the 2020 presidential campaign will positively impact the economy — while about 18% believe the economy will be negatively impacted.
    • Investors are almost twice as likely as non-investors to believe the campaign will positively benefit the economy, and six-figure earners are also more likely to agree with this proposition.
  • Like many topics in politics, the potential economic impact of re-electing Donald Trump is a polarizing subject.
    • When asked which 2020 presidential candidate made them most optimistic about the future of the U.S. economy, the most-cited candidate was Donald Trump, with 33% of respondents overall.
    • When asked which candidate made them most pessimistic about the future of the U.S. economy, Trump was yet again the most cited candidate, by 35% respondents overall.

How could the state of the U.S. economy impact the election?

Our survey found that about 4 in 10 respondents think you can at least somewhat predict the outcome of the presidential election based on U.S. economic performance in the year leading up to the election. Meanwhile, 37% say that they do not think that economic performance could predict the election’s outcome, while nearly 22% were not sure.

Republicans were more likely than Democrats to say that economic performance could at least somewhat predict the 2020 election, 53% versus 43%. Meanwhile, 50% of millennials think that the state of the economy could at least somewhat predict the 2020 election, compared to 40% of Gen Xers and 32% of baby boomers.

Our survey asked whether people monitor the stock market and economic performance when deciding which presidential candidate to support. We found that the majority of people (64%) do not track such metrics when deciding who to support, while approximately 21% do somewhat and 15% do a great deal. The results didn’t differ greatly when considering party affiliation: 40% of Democrats and 42% of Republicans follow these metrics at least somewhat when determining who to vote for.

How could the election impact the U.S. economy?

While our survey revealed that many people think that economic conditions can help predict the outcome of the 2020 election, we also asked respondents how they think the election will impact the economy once the polls close and the next president is selected.

Overall, people feel very differently about how the 2020 election results will impact the economy, with 31% of respondents saying it will positively affect it, 18% saying it will negatively affect it, 42% saying they are unsure how it will affect it and 9% saying it will not affect it at all.

Those results look somewhat different when party affiliation is taken into account: 41% of Republicans said the outcome of the election will positively impact the economy, compared to just 32% of Democrats. Meanwhile, Democrats were more likely to say that the election would have a negative impact on the economy, 19% compared to 14% of Republicans.

Different generations also had different thoughts on how the election’s results might affect the economy, with millennials (39%) most likely to say they think it will have a positive impact, followed by Gen Xers (28%) and baby boomers (24%). In contrast, Gen Xers were the generation most likely to say the election will have a negative economic impact (20%), followed by millennials (18%) and baby boomers (15%).

Our survey also revealed how people think the stock market will react to a President Trump re-election. Overall, 31% of respondents think that the stock market will fall if Trump is re-elected, 26% think the market would rise, 28% are unsure of how the market would react and 16% think it won’t change. Not surprisingly, 50% of Democrats think the stock market will fall with a Trump re-election, while 52% of Republicans think it will rise.

How could the election impact investor confidence?

Everything from a CEO’s tweets to global trade deals has the potential to rattle an investor’s confidence — and our survey found that the 2020 election is no exception.

Interestingly, we found that overall, 37% of people avoid investing their money during election years. That includes 41% of Democrats and 39% of Republicans, as well as a whopping 56% of millennials, 29% of Gen Xers and 13% of baby boomers.

One reason for the lack of investment during election years could be chalked up to overall uneasiness about the state of the economy in general. When looking at the 2020 election in particular, many respondents aren’t too confident in many metrics that measure the health of the economy.

Overall, 28% of those surveyed are at least somewhat unconfident that the stock market will continue to rise, 30% are at least somewhat unconfident that the U.S. will continue adding jobs in the next 12 months and 29% are at least somewhat unconfident that the overall U.S. economy will continue to grow over the next 12 months.

When looking at confidence levels regarding the overall future of the economy, our survey found that Democrats are much more pessimistic than their Republican counterparts: 38% of Democrats were at least somewhat unconfident that the overall U.S. economy will continue to grow over the next 12 months, compared to just 19% of Republicans who feel the same way.

When looking at how the economy is now versus how it was on the night of the election in 2016, different political parties have very different viewpoints. Only 16% of Democrats think that the economy is in a better position now, compared to a whopping 68% of Republicans.

When asked which presidential candidate made them the most optimistic about the future U.S. economy and which one made them the most pessimistic, the most popular candidate was the same for both: Donald Trump. Overall, 33% of respondents said that Trump was the candidate that made them the most optimistic about the economic future, followed by Joe Biden (17%), Bernie Sanders (14%) and Elizabeth Warren (12%).

Meanwhile, 35% of respondents said that Trump was the candidate that made them the most pessimistic about the future of the U.S. economy, followed by Sanders and Biden (both at 14%) and then Warren (11%).

Methodology

MagnifyMoney commissioned Qualtrics to conduct an online survey of 1,048 Americans, with the sample base proportioned to represent the general population. The survey was fielded October 1-3, 2019.

In the survey, generations are defined as:

  • Millennials are ages 23 to 38
  • Generation Xers are ages 39 to 54
  • Baby boomers are ages 55 to 73

Members of Generation Z (ages 18 to 22) and the Silent Generation (ages 74 and older) were also surveyed, and their responses are included within the total percentages among all respondents. However, their responses are excluded from the charts and age breakdowns due to the smaller population size among our survey sample.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Survey: Millennials Are Underestimating Retirement Savings Needs

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone and is not intended to be a source of investment advice. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

For many savers, a cozy retirement can seem like a distant dream rather than a realistic future. Costs of living continue to rise, while it’s becoming harder for many to keep up with saving. More and more senior citizens are working into retirement, and millennials may be underestimating just how much they’d need to save for retirement in the first place.

MagnifyMoney commissioned a survey of 800 full-time workers to get a better look at their understanding of their own retirement savings needs. The results show that while millennials may be underestimating the real costs of retirement, so are baby boomers. Furthermore, some baby boomers indicated that no amount of money would make them comfortable enough to retire.

Key findings

  • 73% of full-time working Americans believe $1 million is enough to get them through retirement if they stop working at age 66. There was widespread agreement on this across all age groups.
    • $1 million in retirement savings is a general rule of thumb to follow, although an individual’s actual retirement savings should be more specific based on projected spending in retirement.

  • Meanwhile, nearly 1 in 5 millennials said having $500,000 in their retirement savings account would make them comfortable enough to stop working tomorrow. Another 14% of millennials would retire after amassing $750,000.
    • Millennials aren’t alone in believing less than $1 million is enough. Across all age groups, 20% of respondents said that $500,000 in retirement savings was enough. The next largest cohort — 17.4% of respondents — said $1 million in retirement savings was enough.
  • Interestingly, more than 1 in 5 baby boomers responded similarly to millennials, saying just $500,000 would get them through retirement if they stopped working tomorrow. Another 15% of boomers said $750,000 would be enough to retire.
  • Some baby boomer respondents offered a bleaker outlook: More than a quarter of Americans ages 54-73 reported that no amount of money would make them comfortable enough to retire.
    • Boomers were almost twice as likely to say that no amount of money would make them comfortable enough to stop working compared to younger Americans. 14.4% of millennials and 15.2% of Gen X-ers had the same sentiment.
    • Boomers may be less willing to stop working than other age cohorts because they believe they need to save more before they stop working, or because some feel you can never really have enough money saved for retirement.
  • More than 1 in 10 Americans have lofty goals for their retirement savings. Just under 12% of our respondents want to accumulate at least $3 million before ending their career.

How much should I save for retirement?

Saving for retirement is not an exact science. Shooting for a $1 million nest egg is a common rule of thumb — and most survey respondents agree that $1 million would be enough.

However, the amount of retirement savings you need depends on your estimated expenses in retirement. Your exact number could be more or less than $1 million, depending on how much you expect to spend on housing, discretionary costs or lingering debts.

For example, $1 million in savings would fund a 20-year retirement where you’re limited to $50,000 in annual spending. If you anticipate a 30-year retirement, $1 million in savings would only cover around $33,000 in annual spending.

How much you should have saved for retirement also depends largely on your age. For example, it’s unlikely that at 30 years old, you’ll already have $1 million set aside unless you’re extremely blessed. You’ll have to build up your savings as you go and as your income, hopefully, increases with age.

Fidelity offers a different take on savings guidelines by age. According to Fidelity, by age 30 you should have 1x your annual salary saved, growing to 3x your annual salary saved by age 40, 6x by 50, and 8x by 60.

How do I save for retirement?

If you think you’ve underestimated how much you truly need to save for retirement, there’s still time to get your savings on track.

A common retirement savings tool is the 25x rule, which dictates you need to have 25 times your annual retirement expenses saved. Core to this rule is the assumption that you’ll need to cover 25 years of retirement. So if you calculate an estimated $70,000 in annual spending in retirement, for example, following the 25x rule would indicate a nest egg goal of $1.75 million.

That’s a far cry from the mere $500,000 that 20% of our respondents indicated would be adequate for retirement. If you stuck to that goal, by the 25x rule, your annual spending in retirement would be cut down to $20,000.

It’s best to throw your retirement savings into an investment account, rather than a high-yield savings account. Over time, investing can post returns around 8%, well above the 2% savings APYs we see today. Retirement savings are more than just your 401(k), too: individual retirement accounts, or IRAs, allow you to save on your own, whether instead of or in addition to your 401(k).

If you’re an investing beginner, there are a ton of resources out there to help you get started. Robo-advisors and online brokerages offer an easily navigable investing experience that allow you to set your own goals and preferences.

Methodology

MagnifyMoney by LendingTree commissioned Qualtrics to conduct an online survey of 816 full-time American workers. The survey was fielded October 1-3, 2019.

We define millennials as those aged 23 to 38, Gen X as those 39 to 53 and Boomers as those aged 54 to 73. Members of Gen Z (ages 18 to 22) and the Silent Generation (ages 74 and up) were also surveyed, and their responses are included within the overall total percentages. However, they were excluded from the age breakdowns due to the lower sample size among respondents in those age groups.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Study: The Best 25 Careers for Being Your Own Boss

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Plenty of people dream of becoming their own boss. However, options for self-employment are heavily dependent on one’s industry and occupation. To help better inform your career planning, this MagnifyMoney study takes a closer look at the occupations best suited for self-employment.

When evaluating the leading occupations where you can be your own boss, we looked at several key factors: median earnings, change in earnings, estimated employment change for long-term opportunity, annual occupational openings and the percent of people in each occupation who are self-employed.

Key findings

  • The best occupation for self-employment is food service manager. Currently, more than a third of food service managers are self-employed. Plus, the industry is expected to grow 10.8% from 2018 to 2028.
    • The average food-service manager made $54,240 in 2018, a decent income for a job that typically does not require a college degree, according to the Bureau of Labor Statistics (BLS).
  • The second-best job for being your own boss is construction manager. Roughly 40% of people employed in this profession are self-employed.
    • The median wage for construction managers in 2018 was $93,370, a 2.20% increase from 2017. If you’d like to be your own boss as a construction worker, chances are you’ll need a bachelor’s degree, reports the BLS.
  • Real estate agent is the third best job for being self-employed. Roughly 56% of real estate agents are self employed, the highest percentage out of the top 25.
    • In 2018, the average real estate agent made $48,690, and average earnings for this profession are on the rise. From 2017 to 2018, the average real estate agent saw earnings rise by nearly 6%, perhaps related to the ever-increasing value of homes in America’s largest cities.
  • Our study found that the worst professions for being your own boss (not listed below) include a variety of lower-paying jobs, like metal workers and machine operators. These jobs tend to have low rates of self-employment, poor long-term career prospects and low pay.

The Best 25 careers to be self-employed

Want to be your own boss? The table below lists the top 25 careers for self employment, as well as more information on each profession.

  • After real estate sales agents, the top third pick, managers have the highest percentage of self-employed workers at 54.5%. Managers made a whopping median $107,480 in 2017 and typically requires a bachelor’s degree.
  • The industry with the highest projected percentage growth from 2018 to 2028 is substance abuse, behavioral disorder and mental health counselors, expected to grow 22.5% in that time.
  • There are a couple wage standouts towards the bottom of the top 25. For example, financial managers made $127,990 in 2018, but the profession ranks low due to its low percentage of self-employed workers (2%). This could prove difficult for those trying to break into the industry as self-employed.
  • Meanwhile, around 20% of lawyers are self-employed and they made $120,910 in 2018. Still, there’s less room for new prospective self-employed workers to join the legal industry, as it’s expected to grow only 6.1% in a decade.
  • Most of the best jobs to take if you want to be self-employed do not require a college degree. In addition to food service managers and real estate sales agents detailed above, massage therapists, chauffeurs, construction laborers and carpenters all cracked the top 10.
  • If you do want to be self-employed, it will still probably require some planning. Even if they don’t require a college degree, a good number of the highest ranking jobs require previous work experience or on the job training.

How we decide which were the best careers to be your own boss

In order to find the best occupations for people looking to be self-employed, we looked at data on 579 occupations. We compared them across six metrics, all pulled from the BLS. Specifically we looked at the following:

  • Percent of workers who are self-employed. We considered this the most important metric to indicate the best careers for self-employment, assigning it a weighting double the other metrics when creating our ranking. For this metric, a higher number indicates the job is more suitable for self-employment as there are already plenty of self-employed individuals in the industry. It also means you’ll have some company in the self-employment journey.
  • Estimated employment change 2018 to 2028. This metric shows the total new jobs for each occupation in the decade from 2018 to 2028. If you’re going to take the plunge into self-employment, you’re going to want to make sure there’s room for growth in your chosen industry. Otherwise, you could get squeezed out too early and left finding yet another job. A higher number here indicates more potential employment in the long term, which would help a job rank higher on our list.
  • Estimated annual occupational openings 2018 to 2028. This number provides a closer look at employment change between 2018 and 2028 by giving the estimated number of job openings each year. The best careers to be your own boss will have higher numbers in this metric as well, as that indicates for long-term opportunity.
  • Percentage change in estimated employment change 2018 to 2028. In addition to the number of projected new jobs, we also looked at the percentage of this change. This metric shows how fast an occupation is growing or contracting. A higher percentage means faster growth which, again, indicates greater long-term opportunity.
  • 2018 median earnings. Of course as with any job, you’re going to want to check the earnings prospects here, especially since being self-employed means you often set your own rates. So we included median annual earnings for each occupation for 2018 for you to get a better idea of each job. This is weighted the same as all the other metrics (except percentage of self-employed workers), which is why you will see a range of earnings within the top 25.
  • Percent change in earnings 2017 to 2018. Looking at a specific year’s earnings provides just a snapshot of that occupation’s pay. So we also took into account the percent change in earnings for each occupation from 2017 to 2018 to show whether an occupation’s wages seem to be increasing or not. A higher percentage indicates faster wage growth and can indicate a more sustainable job over the years, especially when paired with a high percentage of employment growth.
  • Education needed. This metric was not used to create our ranking, but used rather as a bonus tidbit of information. Knowing what kind of education or training is needed for an occupation can help you determine whether it’s right for you or what steps you need to take to be eligible for self-employment in that career.

In order to create our final rankings, we first ranked each occupation in each metric. We then found each occupation’s average ranking across the metrics, giving a double weighting to self-employment rate. We used this average ranking to assign a score to each occupation. The occupations with the highest scores ranked first while the occupation with the lowest score ranked last.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.